In December 2018, Education Corporation of America abruptly closed all of its 70-odd affiliated campuses, leaving almost 20,000 full-time students in the cold. The closure happened immediately after the for-profit program lost its Department of Education accreditation.
After the collapse of ECA, many of the former students were left with tens of thousands of dollars in student debt, much of it to ECA itself. In Pennsylvania, those debts were bought by Elevation Capital Partners, LLC, a business entity whose sole purpose is to buy and pursue private student loan debt.
So, a private company which has nothing to do with education has been seeking to collect debt from students who were defrauded by a for-profit school which could not deliver them any kind of degree.
On April 6, 2021, a settlement was reached with Elevation Capital which will result in $2.6 million in student loan forgiveness for those students, with no action necessary on their part.
“When Education Corporation of America closed down, it left thousands of Pennsylvanians with no degree and a huge financial burden. Today we’ve reached an agreement, and canceled millions of dollars in debt for Pennsylvanians,” said Pennsylvania Attorney General Shapiro in a statement.
The settlement affirms that the students were defrauded into taking those loans by ECA’s misrepresentation of its educational quality, its accreditation, and its job placement rates, and that collecting upon those debts would have violated Pennsylvania debt collection laws.
This settlement in Pennsylvania is a part of a national crackdown on predatory colleges and ruthless private lenders of student loans. In the past decade, tens of thousands of students have been left in debt with no degree by colleges just like those under the Education Corporation of America umbrella. In March, U.S. Department of Education Secretary Miguel Cardona announced approximately $1 billion in student cancellation for federal student loan borrowers, and the Biden Administration sees student loan justice as a key priority.